Modern business corporations have well-defined and documented ethical value systems in place. Ethical problems arise when these value systems are not followed in practice. This study analyzes the value system of the Murugappa Group in vogue. For this purpose, the paper identifies four important stakeholders of the business entity— shareholders, employees, government and the society. The analysis, using the case study approach, shows that the Murugappa Group indeed practices its espoused values and, hence, behaves as an ethical firm.

Business organizations have many stakeholders, including shareholders, creditors, employees, customers, government and the society, and they need to fulfill their responsibility towards these stakeholders in an ethical manner. The corporate moral excellence theory of business ethics demands that business organizations need to practice their espoused values. This theory argues that, if business organizations practice their espoused values, ethical problems would not arise. Every modern business organization has a well-defined value system, which is properly documented and communicated. The problem arises in practicing it. This paper analyzes the value system of an Indian business group, namely the Murugappa Group, using a case study approach.

The Murugappa Group is a Chennai-based business conglomerate with business interests in engineering, abrasives, finance, general insurance, fertilizers, farm inputs, sugar, bio-products, cycles and plantations. The beginning of the Murugappa Group dates back to 1900, when Dewan Bahadur A M Murugappa Chettiar established a moneylending and banking business, headquartered in Moulmein, Burma (now Myanmar). Later, the founder family moved its business to India, and by 1940, Indian business operations of the Murugappa Group were well-established. Currently, the group has 29 companies with a total turnover of Rs. 9,582 cr ($2.4 bn) during the financial year 2007-2008. The prominent companies of the group are Carborundum Universal Ltd., Cholamandalam DBS Finance Ltd., Cholamandalam MS General Insurance, Coromandel Fertilizers Ltd., EID Parry India Ltd., Parry Agro Industries Ltd., and Tube Investments of India Ltd.

Corporate Governance Journal, Carborundum Universal Ltd., Coromandel Fertilizers Ltd., Modern Business Corporations, Business Entities, Business Organizations, Business Ethics, Banking Business, Succession Planning, Murugappa Corporate Board, Business Magazines, Confederation of Indian Industries, CII, International Management Development.